The FRED Blog has discussed how consuming news over the internet has reduced employment in the print media industry. Today we explore a related topic: how firms are gradually shifting from print media to digital platforms to advertise their products.
The FRED graph above shows data from the US Census Bureau on the dollar value of revenue collected by newspapers from selling two types of advertisements: classified (the blue area) and all other (the green area). The data, between 2013 and 2021, are shown as stacked areas to easily observe their change over that period: Classified ads have generally amounted to around 20% of the total advertising revenue for newspapers and their dollar value has shrunk by almost half. Revenue from other types of advertisements, amounting to the remaining 80% of total advertising revenue, has shrunk by a third. These trends seem to align with the declining economic footprint of newspapers. So, where are the missing advertising dollars?
Consumers are shifting their eyes from print media to digital devices, and advertisements are following them there. Recent research from Ricardo Marto and Hoang Le at the St. Louis Fed has examined the economic implications of the rise in digital advertising.
Their work suggests that recent valuations of the digital advertising market might be as large as 1.1% of gross domestic product—the broadest measure of annual US economic activity. They also argue that digital advertising allows for more accurate tailoring of ads to consumers, giving firms more market power to set prices for the products they sell.
For more about this and other research, visit the publications page of the St. Louis Fed’s website, which offers an array of economic analysis and expertise provided by our staff.
How this graph was created: Search FRED for and select “Breakdown of Revenue by Advertising Type: Newspapers Advertising Space – Classified Advertising for Newspaper Publishers, All Establishments, Employer Firms.” Click on the “Edit Graph” button, select the “Add Line” tab, and search for “Breakdown of Revenue by Advertising Type: Newspapers Advertising Space – All Other Advertising for Newspaper Publishers, All Establishments, Employer Firms.” Don’t forget to click “Add data series.” Last, use the “Format” tab to select “Graph type: Area” and “Stacking: Normal.”
Suggested by Diego Mendez-Carbajo.
